Consider a part takeover may be imminent.
Phillit's Atlas Iron AGO is a good example of a plausible surprise attack on CDY. It is also a lesson for us on how suitors can take out even loyal and long term shareholders with a low ball offer.
The play against us should not be dismissed as conspiracy theory as it is a clear and present commercial risk we face. The CEO and the Board (if not behind a hatching bid) should be very worried. They don't dominate the register and would need us to block a takeover.
A crafty, opportunistic bidder does not need to initially target 90% of issued shares to activate compulsory acquisition, but only 51% to gain control of the Board and then do what they like including to replace and/or appoint their own directors and replace the CEO. This may or may not be a good thing, probably not a good thing, but looking at the register and those on the sell side taking control of the company is feasible with a part bid at around $0.40 ps.
It would require only $8.08M at $0.40 ps to gain the 24.25% balance of 20,202,361 shares needed to take 51% control if the suitor and associates already held say, to illustrate, 70% of the shares (viz. 22,277,551 shares) held by the top 20 holding 31,825,073. Or, if the suitor/associates held no shares at all now, then still just $17m for a 51% of 83,293,946 issued shares at $0.40 ps.
A part bid for 51% at $0.40c about now would likely flush out enough shares to succeed. It would short sightedly probably be seen as attractive to many holders to accept: e.g. the impatient for Midkine to blossom, the disillusioned with overall progress, management and/or the sp collapse, those just happy to get their recent $0.38 share purchase plan investment back $0.02 (+ 5%) and walk away even at a loss on their long term holding.
Expect a suitor, as usual, to frighten holders to accept by pointing to the likelihood that if they didn't and the bid failed at the offer price $0.40 ps, the market price would in all probability fall back to the pre-bid $0.25. The misguided, but understandably, short term sense of many would be to accept and lock in the certain $0. 15 (+ 60%) premium.
Most of us here I think believe in the golden future for this emerging company if properly managed to take advantage of its commercial opportunities. The Evolis upside alone is likely to support a sp of >$1.20 within 3 years with a market cap then of $100m. Midkine's long term potential humanitarian medical benefits could possibly drive a sp five-fold further to $6.00 and a market cap of $500m. That upside cannot be ruled out.
We cannot let any part takeover succeed to 'steal' the stock's clear potential from us and handover a 3 to 15 bagger to whoever they may be.
We await with interest the outcome of the present CDY "Trading Status: Inquiry" and "Market Status: Inquiry".
CDY Price at posting:
25.0¢ Sentiment: Hold Disclosure: Held
